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Jul 31, 2021 by |

California And San Francisco Whistleblower Attorney: Potential False Claims Act Liability For Nursing Homes


Nursing Home Chain Potentially Liable Under False Claims Act

Allegations of Ten Years Of False Claims

Nursing Home Reform Act of 1987 And False Claims Liability 

The primary anti-fraud enforcement statute against companies who defraud the government  is the False Claims Act (FCA), 31 U.S.C. §§ 3729 et seq.  The FCA provides a remedy of civil damages when a party 1) makes a false statement or engages in a fraudulent course of conduct that is done with 2) knowledge that was 3) material and 4) caused the government to pay out money or forfeit money it was due. In fiscal year 2020, the Department of Justice (“DOJ”) recovered $2.2 billion in FCA settlements and judgments with $1.8 billion of those dollars involving the health care industry. The FCA establishes a remedy of trebled actual damages meaning the defrauding health care provider will be required to pay three times the amount of reimbursement on each claim that is found to be false.  Additionally, each falsely submitted claim is subject to civil penalties ranging from $11,665 to $23,607.   See 31 U.S.C. § 3729(a)(1)(G) and regulations promulgated thereunder. The FCA allows private individuals to bring an FCA lawsuit on behalf and in the name of the government.  31 U.S.C. § 3730(b)(1).  These private parties are referred to as “relators” under the statute but are more commonly known as whistleblowers.  The FCA provides motivation for whistleblowers to root out fraud because the whistleblower stands to personally recover anywhere from 15% to 30% of the damages and penalties or settlement that stems from the claim. 31 U.S.C. § 3730(d).  If you have credible information of Medicare fraud, illegal kickbacks or other healthcare fraud in San Francisco or elsewhere in California, call us today at (415)441-8669 and we can help. Our toll-free number is 1-888-50EVANS (888-503-8267).

Nursing Home False Claims Act Liability

Nursing homes could incur FCA liability by way of the FCA’s false certifications theory.  See Todd Yoder, DOJ Announces Initiative to Combat Substandard Care in Nursing Homes; Emphasizes Importance of Whistleblowers, National L. Rev. Vol. X, No. 70 (2020).The Nursing Home Reform Act of 1987, 42 U.S.C. § 1395i-3, requires nursing homes to “provide services to attain or maintain the highest practicable physical, mental, and psychosocial well-being of each resident.”   When a nursing home submits payment to the Government (Medicare, Medicaid, Tricare) for reimbursement of a claim, it certifies compliances with all applicable statutes, regulations, and rules.  As such, if the nursing home fails to meet its obligation regarding the appropriate standard of care, then the claim for reimbursement is considered false and subject to FCA enforcement.

Whistleblowers play a key role in such FCA enforcement. On June 2, 2021, the U.S. Attorney’s Office for the Southern District of New York announced it would intervene in a FCA action filed against 11 skilled nursing facilities by a whistleblower.  See U.S. Dep’t of Justice Press Release, Manhattan U.S. Attorney Files Suit Against Eleven Skilled Nursing Facilities and Their Management Company, Owner, and a Senior Employee for Fraudulently Billing Medicare for Unnecessary Services (June 2, 2021) The Complaint alleges patients were kept in the facilities longer than necessary to maximize Medicare reimbursement.  Additionally, during the course of those stays, patients were systematically put at higher levels of rehabilitation therapy than their actual clinical needs demonstrated in order to increase Medicare reimbursement, according to the complaint.

Allegations of Overbilling

In its announcement,[1] the DOJ described its allegations that eleven skilled nursing facilities, their management company, owner, and a senior employee fraudulently billed Medicare for over a decade for unnecessary services.  The DOJ’s lawsuit carries forward claims developed by a private relator through its extensive investigation and data analysis of the Medicare billing practices of the eleven nursing homes.  The complaint alleges that defendants were engaged in significant Medicare fraud through wrongfully extending patient stays and providing unnecessary and unreasonable rehab without regard for patients’ medical needs.  The government alleges that for a full decade, the Defendants allegedly kept Medicare patients at the facilities longer than reasonable or necessary, and put those patients on higher levels of rehabilitation therapy than reasonable or necessary. According to the government these practices were designed to increase the amounts billed to Medicare beyond what was justified based on patients’ clinical needs. In some instances, the facilities allegedly went so far as to intentionally limit patients’ progress in order to create the appearance of a continued need for services.

Remedies For Retaliation

Although the relator in this case was an analytic company, often employees are the individuals who have the original information of the fraud.   While the law prohibits retaliation against whistleblowers, the reality is that such retaliation occurs.  But employees, agents, executives, officers, and others can fight back when it does. 31 U.S.C. § 3730(h).  If you are fired because you brought any fraud to light, you may be entitled to sue your employer in court  and seek double back pay (with interest), reinstatement, reasonable attorneys’ fees, and reimbursement for certain costs in connection with the litigation. 31 U.S.C. § 3730(h)(2). Evans Law Firm, Inc. can represent you in any action for retaliation as well as represent you in your underlying whistleblower application.

Contact Us

If you have credible information of government contractor fraud against Medicare or Medi-Cal call Ingrid M. Evans at (415) 441-8669, or toll-free at 1-888-50EVANS (888-503-8267) or by email at <a href=””></a>.  In addition to FCA and CFCA whistleblower cases, Ingrid also handles bank fraud whistleblower cases under FIRREA/FIAFEA, commodity trading and securities fraud under the Commodities Futures Trading Commission Whistleblower Program and the Securities and Exchange Commission Whistleblower Program, and tax fraud under the Internal Revenue Service Whistleblower Program. 

[1] Evans Law Firm, Inc. is not involved in the case in any way. The case is captioned U.S. ex rel. Integra Med Analytics LLC v. Isaac Laufer, et al., Case No. 17-cv-9424 (S.D.N.Y.).

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